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R&D Tax Incentive Credit in New Zealand

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New opportunities are available for New Zealand businesses to fund innovation projects through accessing the Research and Development Tax Credits program launched mid 2019.

The New Zealand Government offer a R&D tax incentive program through enacting the Taxation (Research and Development Tax Credits) Act 2019 on 7 May 2019. The R&D tax incentive aims to support a wide range of businesses to undertake more R&D and is part of the Government’s commitment to raising New Zealand’s R&D expenditure to 2% of GDP. The R&D Tax Incentive will apply to eligible R&D activities conducted from the 2019/20 tax year. For most businesses, expenditure on eligible R&D activities from 1 April 2019 should qualify.

This program now places New Zealand in line with other countries in the region and globally who have self-assessment programs available to companies to undertake R&D in their jurisdictions.  It makes New Zealand a compelling destination for R&D activities to be undertaken and supported by providing a 15% tax credit for eligible activities.  This is a very competitive rate which should drive investment into New Zealand improving productivity and creating jobs throughout the country.

Glasshouse Advisory has a team with a track record of working with New Zealand companies when the last R&D Tax Credit was in place in the mid-2000s.  Sandra Boswell assisted some major New Zealand companies through the claim process for the period that this program was originally in place.  Our team works on a mobile basis across New Zealand and our rates are very competitive.  We also have a lot of experience in working with multinationals in accessing other programs in the region, specifically Australia.  The Australian regime, whilst different operates under very similar principles, concepts and definition requirements. 

We as an IP centric business focus on your R&D claims for the R&D Tax Credit as part of your R&D lifecycle and assist in the monitoring and ongoing support of making an R&D claim.  We focus on getting the best documentation in place and real time record keeping as well as identifying ways of protecting your IP that you develop during your R&D activities.  We then focus on a quality application process to ensure you submit your claims on time and with good records to support the activities.


Key Dates and Ways to Access the Program

All entities must file a R&D supplementary return if you want to access the R&D Tax Credit within 30 days of your latest filing date of your income tax return.  You also need to meet your filing requirements for your income tax return.

You can enrol to access the program via myIR and this will provide you access to your supplementary return document.  Glasshouse Advisory can assist through our New Zealand networks to access the program.

Summary features of the R&D Tax Credit

Below are the major features of the R&D Tax Credit.  This summary is indicative and more detail regarding the program can be provided to you. The main features are:

  • A modern definition of R&D intended to ensure accessibility across all sectors including the ability to prove that you are undertaking a core activity
  • Available to all private sector businesses and other structures (as long as certain conditions are met)
  • Accessible for the 2019/20 income year
  • A tax credit rate of 15% on eligible R&D tax expenditure including salaries and wages, contractors and consultants, some overheads and consumables
  • A minimum R&D expenditure threshold of $50,000 per year (unless the expenditure is incurred to an approved research provider)
  • A $120 million cap on eligible expenditure (may be increased upon application)
  • An ability to cash-out R&D tax-losses (limits and additional criteria apply)
  • An ability to claim certain activities conducted outside of New Zealand

There are many other requirements which we would be happy to go through with you in a discussion about how to access the program.  Glasshouse has a strong track record of assisting companies across all sectors access these programs and we can provide our skills and well tested methodology to liaise with you and your technical teams to track your eligible activities.

How we can assist

While the program is highly accessible and far reaching, there are a number of steps involved in claiming the R&D Tax Credit. These include: ensuring your business structure is eligible, identifying eligible projects and expenditure, collation of supporting documentation and registration with relevant regulatory bodies.

Glasshouse Advisory can assist by either reviewing your claim or preparing it for you.  We also provide the following services:

  • Preparing your R&D tax credit claim in using an efficient and tested methodology;
  • Advising on eligibility of activities and ensuring documentation is adequate to support an R&D tax credit claim;
  • Visiting your sites to identify eligible activities throughout the year, often on a periodic basis to record information real time;
  • Development of key IP management strategies and R&D processes to monitor your R&D process so you can meet the eligibility requirements of the new program; and
  • Managing the audit and review process with IRD, including drafting and reviewing submissions and guiding you through the process.
  • Improving documentation and systems, including developing best practice manuals that are customised for your business and sites, to ensure you capture details of eligible activities and costs that can be claimed.

Our unique IP centric perspective and thorough approach allows us to identify all sources of R&D activities and expenses in the context of your innovation, production and overall business activities, while significantly reducing compliance risk associated with the process.

With clients ranging from micro start-ups through to ASX100 businesses, our experienced team members will help to ensure that your business is making the most of its investment in innovation.

Contact our advisory experts to identify new opportunities for your business